Oil prices rebound in post-Brexit bargain hunting

28-Jun-2016

Oil prices topped $48 a barrel on Tuesday as investors took advantage of a two-day slide in crude triggered by Britain's vote to leave the European Union.

The vote's impact on oil, despite sending global stocks and currencies spiraling, has so far been limited due to expectations of strong summer demand in Asia and the United States and tightening supplies after a two-year rout.

A looming strike at several Norwegian oil and gas fields which threatened to cut output in western Europe's biggest producer also helped support prices on Tuesday.

Brent crude futures were up 2.5 percent, or $1.17, at $48.33 per barrel at 1116 GMT.

U.S. West Texas Intermediate (WTI) futures were 2.6 percent higher, up $1.22 at $47.55 a barrel.

A report by industry monitor Genscape that showed a 1.3 million barrel fall in crude inventories at the benchmark's pricing hub in Cushing, Oklahoma, added further support, brokerage PVM said.

Sterling and London's FTSE 100 stock market index also rose on hopes of a coordinated central bank response to financial market losses. 

"Oil is recovering on some bargain hunting after the drop below $47 a barrel proved unsustainable and news of a possible strike in Norwegian oil and gas industry," said Commerzbank analyst Carsten Fritsch.

He said the turmoil in Europe was not expected to have a "meaningful impact on the physical global supply and demand balances". (by Ron Bousso, Reuters)


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